Sen. Formica: Millstone plays vital role in southeastern CT’s economy

December 27, 2016

Bill to open energy markets to Millstone a priority for Formica, other lawmakers

With its armed security guards and tightly controlled access, “vulnerability” is not a term most people would associate with the massive concrete-and-steel structures at the Millstone Power Station.

All the protections from physical threats of natural disasters and human intruders notwithstanding, though, the nuclear plant that is the state’s largest power producer is indeed vulnerable to some unseen forces. At least that’s the way Kevin Hennessy, New England director of state and local affairs for plant owner Dominion, along with some key state lawmakers, characterize the plant’s current situation.

“Nuclear power plants have been getting pinched out of the markets,” Hennessy said last week. “What we’re saying is we’re not immune from those pressures. It’s in the best interest of the consumers to help ensure our long-term stability.”

Since 2012, five nuclear power plants around the country have shut down prematurely as the costs of operating older plants has exceeded revenues for the electricity they produce.

Now, to prevent the two operating reactors at Millstone from the same fate, Hennessy and other company officials are urging state lawmakers to approve legislation in the General Assembly session that begins Jan. 4 to secure the plant’s survival.

Falling prices for natural gas used by other power producers is a key factor in the equation, Hennessy said. Millstone, which supplies 55 percent of Connecticut’s power and 35 percent of the electricity produced in New England, has endured a 44 percent decline in prices for its power over the last decade, company officials testified at a legislative hearing last year.

“We just want to compete,” Hennessy said. “We’re not looking for a handout or a subsidy.”

The legislation still is being developed, according to state Sen. Paul Formica, R-East Lyme, as well as two Democratic colleagues also looking to address the issue in the coming session. But Formica, Sen. Paul Doyle of Wethersfield and Rep. Lonnie Reed of Branford, all members of the Energy and Technology Committee, agree the bill will build on one introduced late in the session last year that passed the state Senate but died in the House of Representatives.

“I want a bill that will make consumers the priority, but that will give Millstone a sense that they have a steady path ahead,” Reed said.
Formica said he considers the Millstone legislation his “No. 1 priority” for the upcoming session, especially considering the vital role of the plant to southeastern Connecticut’s economy.

Key components of the measure, he said, would be that it would enable Millstone to sell its power directly to the state’s two main power distributors, Eversource and United Illuminating, through contracts awarded through a process in which Millstone owner Dominion Resources would bid against big hydroelectric and other large-scale renewable power producers.

At present, Dominion sells Millstone’s power to “hedge funds and financial institutions” that in turn sell the power to regional markets, Hennessy said.

“This would cut out the middle men and give us the opportunity to compete, and be better for consumers,” he said.

Currently, the state Department of Energy and Environmental Protection solicits bids from renewable energy producers as part of a policy to foster growth of energy sources free of carbon-emitting fossil fuels.

But Millstone, though it produces 2,100 megawatts of carbon-free power, hasn’t been allowed into the mix. DEEP officials said they’re open to changing that.

“The workings of the energy marketplace have raised issues in various places around the nation about the continued economic viability of nuclear power plants,” said Dennis Schain, DEEP spokesman. “Given the significant amount of our region’s power produced by Millstone — and the fact that this power is produced without carbon emissions linked to climate change — this is an issue worthy of discussion in Connecticut’s General Assembly. We look forward to learning more about how Sen. Formica and others suggest approaching it in the upcoming session of the legislature.”
Reed noted that New York and Illinois recently addressed the same issue with plants in those states by approving financial subsidies. Unlike those plants, Millstone isn’t threatening to close, but it is signaling that Connecticut needs to take action, she said.

Doyle said he believes legislation could be written that would enable Millstone to sell its power directly to Eversource and United Illuminating, while also minimizing increases in electricity rates for Connecticut customers.

Preserving Millstone is crucial, Formica said, if the state has any hope of achieving its goal of deriving 20 percent of its energy from carbon-free sources by the year 2020.

“This is not about expanding nuclear,” he said. “It’s about using nuclear as a bridge to the renewable future.”